In one of our earlier blog posts, we recommended a few credit cards that do not charge foreign transaction fees when you use the card outside of the US. If you travel abroad and don’t have one of those credit cards, your “conventional” credit card might be charging in the area of 2% for foreign transaction fees every time you swipe your Visa or MasterCard at a restaurant, hotel, or car rental office.

Capital One, Chase, Barclay, and other banks offer credit cards with no foreign transaction fees- you just need to ask and apply for one. However, this is not the end of the story. You have to be aware of the convenience service that will be offered once you swipe the card. Here is how I finally figured this out.

During our recent trip to Switzerland, I noticed that every restaurant and hotel asked if I wanted to settle my bill in Swiss Franks or US dollars. They all had portable credit card machines that asked to choose US dollars or Swiss Franks before completing the transaction. The first time I had to choose the currency, we just finished dinner at a nice restaurant in Geneva, and I asked the waiter who spoke decent English what he would recommend. His reply was that it did not really matter, but perhaps paying in US dollars would be more convenient. Being an adventurer, or maybe having one too many beers, I chose US dollars. When the card reader printed my receipt, I was informed in rather small print that the local bank that offered this convenient currency conversion also charged me 3% of the entire bill. The transaction was final and could not be reversed. From this point on, I asked for “Swiss Franks only, please!”

So, your best choice would be to use a no-foreign transaction fee credit card and choose local currency when paying the bill.